Lafarge has agreed to sell its North American plasterboard business to Lone Star, the US private equity group, for $700m as it pushes ahead with cutting debt and refocusing on its core cement and aggregates business.
The French cement maker said on Monday that the deal would mean it had almost completed its exit from gypsum-related businesses, first outlined in 2011. Lafarge has already sold the bulk of its gypsum operations in Europe, South America and Asia, which represented 9 per cent of sales in 2005. The US division generated sales of $310m in 2012.
The move is part of a wider package of disposals by Lafarge, which was saddled with large debts going into the downturn – in large part because of its €10bn acquisition of Orascom Cement, its Egyptian rival, in 2007. The company’s debt peaked at €17bn in 2008 and it is aiming to cut it to €10bn.
As a result of this debt and its exposure to the Egyptian construction sector, Lafarge had its credit rating downgraded to junk in 2011 – the first time its bonds had ever fallen below investment grade.
Lafarge made close to €900m of divestments last year, with further asset sales expected in 2013. In January, the group sold six US quarries worth $160m.
Lafarge, which employs 65,000 people in 64 countries, reported sales of €15.8bn in 2012. It is planning to expand its operations in emerging markets, where it has 75 per cent of its cement capacity. In 2012, cement accounted for 66 per cent of sales, with aggregates and concrete contributing almost all of the other two-thirds.